The upper level of more sophisticated colorants still remains the preserve of mostly European-based manufacturers. In fact, leading pigments makers, including BASF, Clariant and Ciba Specialty Chemicals, are now making a large proportion of their standard pigments in Asia while continuing to use Europe for the development and production of more value-added products.
However, pigment producers outside the EU are making technological progress so quickly that they are beginning to penetrate this upper tier. European producers are having to step up their technological efforts to ensure they hang on to key specialty segments.
Innovation is one way of pushing up margins at a time when pigment prices have been dropping in the face of pressure from less expensive imports and sluggish demand.
Pigment producers have few opportunities at present to raise their own prices. The strong euro, which has risen by approximately 30 percent against the U.S. dollar since last summer, has resulted in Europe becoming even more of an attractive market for Asian and other exporters.
In the last few months, demand for inks has been flat or even declining, with much of Western Europe on the brink of recession. The costs of the oil-based raw materials of pigment makers have been rising, but the excess in pigment supplies is making any attempt to increase selling prices extremely difficult.
The choice of pigments available to European ink producers has been widened by the improvements in the quality of pigments coming into Western Europe. Chinese and Indian exporters have also been raising the efficiency of their distribution networks.
“There used to be too many disadvantages in buying pigments from Asia,” a purchasing manager at one medium-sized European ink producer said. “The price was good but the quality was inconsistent and the range was limited.
“But now we are in the process of moving over to Asian supplies for a large proportion of our pigment requirements,” he continued. “The prices are still highly competitive, but the quality is much better and the range is much more comprehensive. Consistency can still be a problem, but that is outweighed by the low price.”
Asian manufacturers, particularly in China, already account for a big share of standard organic pigment sales in Europe. Now Russian and Middle Eastern producers are beginning to make inroads into the inorganic sector, in particularly in the market for carbon black printing ink pigments.
The whole carbon black market has in fact become a battleground between European and U.S.-owned producers on one side and Alexandria Carbon Black (ACB) of Egypt and a group of Russian exporters on the other. ACB, which is owned by Aditya Birla Group of India, plans to establish in Egypt the world’s largest single site for carbon black production.
The European Commission, the EU executive, recently recommended the imposition of anti-dumping duties on imports of rubber-grade carbon black by ACB and three Russian producers. But after heavy lobbying by European tire manufacturers, EU governments rejected the commission’s proposal.
“The Russian producers have been selling carbon black to makers of newspaper printing inks, which has had an impact on prices in that segment,” said Thomas Boehland, a product manager at Degussa AG, one of Europe’s largest carbon black manufacturers.
“ACB has also been coming up through the ranks pretty fast and has started moving into offset inks for magazine publishing,” he added. “But the importers are having difficulties with gravure inks because of problems with dispersion and traces of abrasive materials in their pigments which can damage the gravure cylinders.”
Degussa is the only Western producer of iron blue which was used in a wide range of printing inks, but now tends to be applied only in gravure inks where its main rival is Asian-produced copper phthalocyanine blue.
“Iron blue is still cheaper than the phthalo blue,” said Mr. Boehland. “The Chinese are now producing iron blue at a lower price but they can’t meet European quality standards.”
Degussa is competing against imports of carbon black and iron blue by focusing on quality and innovations, such as coated pigments to improve dispersion. It is also putting a lot of emphasis on service.
“A lot of importers can’t compete with service at a time when ink producers want technical help with designing inks for specific applications,” Mr. Boehland said.
Tougher Safety Standards
For importers and for the European pigment industry as a whole, safety standards will become a major issue as a result of the introduction of new tough EU regulations which could lead to the withdrawal of some products and make access to the European market much harder.
The European Commission is currently finalizing draft legislation on Registration, Evaluation, Authorization of Chemicals (REACH), which will cover all substances with an annual output of more than one metric ton.
Under the plan, producers and importers of chemicals will have to assess their risks to human health and the environment while users will have to demonstrate in a registration dossier that they are using them safely.
European pigment makers are already warning that they may have to stop manufacturing certain pigments because of the cost of carrying out tests on them and providing safety dossiers under the REACH system.
“There is a question about whether some specialty products will be able to carry the extra testing costs without being priced out of the market,” said Robert Fischer, secretary of Eurocolour, representing European producers of pigments, colorants and fillers.
A recent report by Mercer Management Consulting on the impact of REACH on the French economy estimated that production of as many as 20 percent of pigments could cease. This could also mean that an even higher proportion of downstream products would have to be reformulated.
A lot will depend on how many pigments are classified under the legislation as intermediates, for which testing requirements will be less stringent. Some intermediates to which end-users are not exposed will be exempted altogether from REACH, according to the proposals.
The plan could be a blow to exporters into Europe, particularly in Asia. Although REACH is due to be phased in over 11 years, it could stem the flow of pigment imports.
“Importers have at the moment only to provide safety data sheets but REACH will require considerably more information than that,” said Mr. Fischer. “If the manufacturer of the imported products cannot provide the necessary toxicological data, the distributor will have to do so.”
European pigment makers are relying on innovation to protect themselves against low-priced competition and also to keep ahead of safety regulations.
Ciba, for example, has launched several new products already this year, including a water-stable rubine pigment for magenta shades in water-based inks and a number of pigments and dyes for ink jet inks.
“(We have) an exceptionally full new product pipeline this year,” said Mike Mordente, Ciba’s head of marketing for inks and graphic arts. “We launched eight new products in the first quarter of this year, seven of these being colorants for the printing ink industry.
“Ciba is impacted little by (commodity-type imports),” he said. “We invest significantly in innovative, high-quality products and processes, and, furthermore, offer a comprehensive technical service and support.
“There are many significant opportunities in specialty pigments for printing inks,” Mr. Mordente added. “In particular, the growth in the packaging, ink jet and UV sectors provide scope for product development. At Ciba we see innovation as the key to success.
Developing products for these growing sectors will help to offset the pressures in the more traditional applications.”
Innovation in pigments often requires close cooperation not only with ink producers but also printing equipment manufacturers, converters and designers.
Merck KGaA, which specializes in metallic effect pigments, has been working with Heidelberg, prepress and printing refinement companies and a carton producer to develop applications for its Iriodin pearl luster pigments in a single-line process.
In an extended version of Heidelberg’s Speedmaster Duo press, Iriodin can be applied as a first color in a flexo unit and then be overprinted by up to six offset inks with the possibility of a Iriodin varnish on top.
“With the use of Iriodin in water-based processes of the Duo technology in flexo printing units, we consistently achieve excellent results in the areas of offset printing and overprint varnish,” said Thomas Heissler, a project manager at Heidelberg.
Collaboration is essential in the ink jet ink sector, where pigments are increasingly being used as colorants at the expense of dyes as digital printing expands from desktop into industrial and commercial uses.
Avecia has been developing pigmented UV-curing ink jet ink for use on non-porous substrates with Dotrix, the Belgian digital press manufacturer.
“We are supplied with base pigments by a quality pigment producer, which we then coat ourselves to ensure the correct dispersion,” said Paul Ewing, Avecia’s research manager for ink jet inks. “The Dotrix machine has a 65-centimeter wide array of static printheads which print on to a reel-on-reel substrate so the pigmented ink has to have an exceptionally high reliability without any danger of the heads getting clogged up. The pigment solution has to be exactly right.”